Top mortgage execs admit to $8.9 million scam

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Two senior executives from Vanguard Funding are looking at up to 20 years in prison each after pleading guilty to participating in a scheme to embezzle more than $8.9 million from the company.

Edward J. Sypher Jr., former chief financial officer at Vanguard, and Matthew T. Voss, the company’s former chief operating officer, pleaded guilty to conspiring to commit wire fraud and bank fraud, according to the US Attorney’s Office for the Eastern District of New York.

According to prosecutors, Sypher and Voss orchestrated a scheme in which they obtained warehouse loans for Vanguard, telling the lenders that Vanguard planned to use the proceeds of those loans to fund purchase mortgages or refinances for Vanguard clients. When Vanguard received the loans, however, Voss and Sypher diverted the money for their own use. Prosecutors said that they used the ill-gotten gains to pay personal expenses and pay off previous loans they had obtained fraudulently.

Voss and Sypher were arrested in August along with Vanguard’s president of sales, Edward Bohm. Prosecutors believe that the three ran the scam between August of 2016 and March of 2017.

“These defendants, for their own gain, allegedly defrauded the financial institutions that provide funding for individuals to buy homes, and they must be held accountable,” New York Department of Financial Services Superintendent Maria T. Vullo said at the time of their arrest.

Bohm, at least, apparently thought the three wouldn’t face criminal liability because they victimized banks instead of people. I

“At the end of the day, the s**t we did wasn’t to the public,” he said in a recorded conversation with a co-conspirator in 2017.

His confidence might have been misplaced, however. Sypher and Voss, when sentenced, could get up to 20 years in prison each, in addition to facing criminal forfeiture, payment of restitution and fine.

Editor’s note: Vanguard Funding is not affiliated with investment company The Vanguard Group.